Tag Archives: MENA

I sat paging through Arabian Business’s list of the 500 most influential Arabs. #2 Wael Ghonim – Google exec made famous by his role in the Egyptian protests. #21 Amr Diab – played his pop music on repeat while in Egypt. #22 Amin Maalouf – one of my favorite authors. Click. Scroll. But the most powerful Arab names in business, science, media, sports, and culture soon became less and less recognizable. I began to become discouraged: Do I really have such a narrow understanding of this region after years of study, learning Arabic, and living abroad?

Then I got to #128 Elia Nuqul. Here was a prominent, though likely lesser known, businessman of whom I knew a disproportionate amount. Elia Nuqul is the founder and current chairman of Nuqul Group, a Jordanian firm established in 1952 that has grown to encompass more than 30 companies. No, I don’t follow the region’s corporate developments with microscopic attention, though I wish I could. But Nuqul Group made a powerful impression on me after I read about the group in CIPE’s case study guideAdvancing Corporate Governance in the Middle East and North Africa: Stories and Solutions, and listened to Vice Chairman Ghassan Nuqul explain the group’s self-discovery of corporate governance.

In fact, on June 12, CIPE Program Officer Danya Greenfield presented alongside Ghassan Nuqul at the Third Strategic Corporate Governance & Responsibility Forum, which took place in Amman, Jordan. Danya launched the case studies guide and accompanying DVD on a panel that included Philip Armstrong, Head of the Global Corporate Governance Forum (CIPE’s partner in producing the case studies), and Slim Othmani, chairman of NCA-Rouiba (an Algerian company also profiled in the case studies and DVD).

I was not surprised to find Elia Nuqul listed as one of the most powerful individuals from the Arab world. I remembered from the case studies that Nuqul Group had undergone a rapid expansion since its establishment, but found that implementing corporate governance practices allowed for the decentralization of decision-making and formalization of roles and procedures to allow the group to sustain its growth. As Vice Chairman Ghassan Nuqul explained, “I can tell you in my case what developed and what evolved in Nuqul Group was done in response to challenges and actual needs on the ground — and it turned out to be what you call corporate governance.”

I wouldn’t be astonished to find that many more of the 500 most influential Arabs were implementers of corporate governance in their corporations.

Given the tumultuous change and economic stagnation throughout the Middle East and North Africa, one might be tempted to ask, is corporate governance even relevant in the current environment? The answer is yes, and here’s why.

Corporate governance is intrinsically linked to the concerns being expressed by people throughout the MENA region because good corporate governance and good democratic governance both are based on the values of accountability, transparency, responsibility, and fairness. There is now a new opportunity to talk about these issues – and how to establish institutions that uphold these values – that was never possible before.

The conference gathered more than 100 practitioners and businesspeople from around the world and raised issues related to corporate governance, corporate social responsibility, and sustainability.

The driving force for the region’s popular uprisings is economic concerns, including unemployment and a low standard of living. Addressing these issues will require a dynamic private sector that will generate new job growth. To achieve the aspirations of the youth, it is essential to help develop stronger, more sustainable business, which depends on creating an environment where the private sector can flourish.

Implementing corporate governance is one important step in this direction – it will help companies attract investment, instill shareholder confidence, and improve productivity, and will also help rehabilitate the reputation of the business community in an environment where the private sector’s reputation is under attack. Corrupt crony capitalists associated with the ruling regimes in Tunisia, Egypt and elsewhere have given the private sector and free markets a bad name.

Standing against corruption and demonstrating a commitment to corporate governance, transparency, and disclosure of conflicts of interest is an important way for businesses to generate trust and regain credibility that may have been lost.

Lofty democratic ideals will not motivate all business owners, but there are concrete benefits that corporate governance helps realize. CIPE and GCGF talked with companies around the region in order to gather success stories of how and why they made governance changes and what positive impact it had. The resulting guidebook presents real-world, practical examples that show how companies in the region overcame barriers and improved their governance practices in ways that benefited performance and growth.

The guide is intended to serve a real-world purpose: To provide assistance and motivation to directors, senior managers, regulators, and others as they try to improve existing corporate governance practices.

As governments increasingly look to the private sector to stimulate economic growth, the business community has a unique part to play in promoting values of accountability, fairness, and responsibility. This new role will help to advance democratic institutions and strengthen business ethics to the benefit of the public sector, the private sector, and society at large.

The world is anxiously watching Egypt: How will the country reconcile more than 80 million voices so that it can proceed along the path of democracy?

Egyptians now widely recognize that the difficulty of toppling Hosni Mubarak – once seen as an insurmountable challenge – pales in comparison to the complexity of building consensus on the steps necessary to construct institutions of democratic governance for a new Egypt.

CIPE Egypt office staff and partners recognized this challenge early on. From February 22-24 CIPE partners Al Masry Al Youm and the Federation of Economic Development Associations (FEDA) organized a conference at which more than 200 representatives of business associations, political parties, youth and other political movements, think tanks, media outlets, academia, government, and the Supreme Council of the Armed Forces itself presented a set of recommendations on the transitional period and future reforms.

As part of this series of seminars to foster an inclusive discussion on Egypt’s future, CIPE co-sponsored a roundtable with Al Masry Al Youm last week to discuss the relationship between political and economic freedoms and the connection between democratic governance and market-oriented reform. As featured speaker, CIPE Executive Director John D. Sullivan stated,

Our purpose today was to gather together some important thought leaders and to begin to identify the most fundamental issues that Egypt has going forward.

Journalists, academics, political party leaders, youth movement leaders, and business association representatives sought to answer: Why did Egypt’s earlier attempts at market-oriented reform fail to deliver for most Egyptians? And, what democratic institutions will need to be in place for the majority of Egyptian citizens to share in the country’s economic growth and prosperity?

Learn what prominent Egyptians have to say about the need for institutions that support transparency and accountability in Egypt, public awareness about the functions of democratic institutions, and more by watching Al Masry Al Youm’s segment on the roundtable discussion.

These days, many can rattle off the statistics on Yemen – half of the population in under the age of 18; more than 50 percent of youth are unemployed; per capita income is a mere $1,200; GDP for a country of 24 million is only twice that of Bahrain, a state of just 800,000; and 54 out of every 100 individuals owns a gun. But few can give context to these figures as can CIPE Regional Director for Africa and the Middle East, and Yemen native, Abdulwahab Alkebsi, interviewed yesterday alongside former Ambassador to Yemen Barbara Bodine on the Kojo Nnamdi Show.

Alkebsi emphasized that while there is great cause for concern in light of changing political currents in Yemen, the country has remarkable potential. As Alkebsi underscored, Al Qaeda’s presence in Yemen is a result of the hopelessness of an overwhelmingly young population that is forced to live without political and economic freedoms.

Yemenis need to recover their dignity – through meaningful work and economic empowerment, and the ability to participate in the political process. Recent protests have given Yemenis a seed of hope, but only institutional reforms that address systemic issues such as corruption, arbitrary implementation of the law, unprotected property rights, and a weak education system will create an environment that will allow a possible democratic transition to deliver for citizens.

CIPE has a robust program in Yemen, as Alkebsi mentions, which seeks to break down obstacles to market-oriented reform. Destructive Beast, a CIPE-produced documentary film, not only highlights the destructive effect of corruption on the Yemeni economy, but offers constructive solutions to jumpstart a debate on policies to combat corruption.

Entrepreneurship, civic education, economic journalism, and corporate governance work have also placed CIPE and its partners at the intersection of local efforts to promote economic and political reform in Yemen.

Though Yemen is often discussed as a failed state, Alkebsi points out just a few of the advantages Yemen has in its back pocket: the Yemeni diaspora has capital to invest in the country and assets such as the Aden port can blossom – should the investment environment improve and security be ensured.

Listen to Alkebsi and Bodine discuss these topics and more – including religious, territorial, and security issues in Yemen as well as the challenges facing a political transition.

While the situation in the Middle East is fluid and the future is quite uncertain, it is clear that good governance and transparency will be key ingredients for a successful transition to more representative political systems. Just as the political leadership must rise to reach this higher threshold, so too will the private sector as it responds to the backlash against corrupt businesspeople who siphoned millions from the public.

As a resource for businesses looking to reach that higher threshold, CIPE and the Global Corporate Governance Forum have just released a new guidebook and accompanying video, Advancing Corporate Governance in the Middle East and North Africa: Stories and Solutions. The rampant corruption, self-dealing, and lack of accountability that corporate governance seeks to address are exactly the problems that have enraged prompted thousands of ordinary Egyptians, Tunisians, Yemenis, Bahrainis and others to take the streets and demand reform and political change.

The new governments that emerge in the wake of these revolutions – and existing ones that pledge reform – will need to respond to the legitimate demands of its citizens and be accountable for its decisions and actions. With tainted business tycoons and crony capitalists of the regimes under attack by opposition movements and protesters, it is critical that business leaders engaged in legitimate and productive economic activity –which is the vast majority of the business community — demonstrate firm commitment to transparency and combating corruption. CIPE’s partners in Egypt and elsewhere are leading the charge.

One way for businesses to achieve that is by incorporating sound corporate governance practices that ensure proper mechanisms are in place to uphold the core principles of fairness, accountability, responsibility and transparency. Such practices include equal and fair treatment of shareholders, disclosure of financial records, addressing conflicts of interest, and setting clear employment policies based on merit not connections. The resource that CIPE and GCGF developed is a practical guide that describes how companies of different types and sizes in the Middle East and North Africa region were able to overcome challenges and improve their corporate governance practices through a gradual process.

As these new governments increasingly look to the private sector to respond to pressing economic needs and stimulate job growth, the business community has a unique part to play in promoting values of accountability, fairness, and responsibility. This new role will help to advance democratic institutions and strengthen business ethics to the benefit of the public sector, the private sector, and the general public.

Citizens in the Middle East have made it abundantly clear that they will no longer tolerate authoritarian rulers who have curbed freedoms, mismanaged economies, and allowed corruption to permeate society. Following political transitions in Tunisia and Egypt, calls for reform are reverberating across the Middle East – from Bahrain to Jordan, and from Lebanon to Yemen.

What is not clear is whether the transitions underway will remove one class of corrupt cronies and authoritarian rulers, only to retain the same social contract between leader and citizen – with the people continuing to look to government to provide jobs and welfare rather than to provide a conducive environment for entrepreneurship and market-based prosperity. The perilous populist policies that are being demanded, considered, and adopted in the current fervor may result in capital flight, loss of more jobs, economic turmoil, and a return to unilateral decision-making.

In his Economic Reform Feature Service article, CIPE Regional Director for Africa and the Middle East Abdulwahab Alkebsi focuses on Tunisia, arguing that the private sector’s immediate and dedicated engagement in reforms is crucial for Tunisia to transition into a democracy, attain its development goals through private sector-led job creation, and gain its place as the economic powerhouse of the region.

Rather than turning to the government for unilateral decision-making and to the public sector for employment, reforms should remove legal barriers that prevent the private sector from becoming the engine for job creation.

To be successful, Tunisia’s transition must encourage participation from a broad range of society, including business associations, other civil society organizations, and political parties.

In the United States it seems like you can’t do anything these days without being asked to partake in a survey. These range from the practical email survey from an airline asking you to rate the service on a recent flight (VERDICT: fair, verging on poor), to the mundane survey question posed on your friend’s Facebook profile (VERDICT: Diet Coke is better than Diet Pepsi). Simply put, surveys are a staple of our everyday lives. In the policy arena as well, the US government, think tanks, and NGOs have regularly used surveys to gather data on various topics in an effort to better delineate policy priorities.

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The CIPE Development Blog provides coverage of the Center for International Private Enterprise and its partner network at work -- highlighting successes, drawing out lessons from failure, and exploring the broader issues of political and economic development. For more information visit CIPE.org.